I’ve talked before about wanting to build up a sizable giving fund before retiring early, even it means this last year or two of work is more for the benefit of others than for me.
In late September I sat in the audience of FinCon, the financial media conference, and watched an interview with Pete from Mr. Money Moustache. He’s a very interesting character, quite down-to-earth and prone to saying things so full of common sense that you have to laugh because no one has said them before.
PoF asked MMM about the latter’s donation of $100k, his plans to do it again, and so on. What ensued was a few moments of conversation about a topic we often hear very little of in the personal finance community: giving.
To help you in this effort, I want to offer some suggestions for how to incorporate giving into your FI plan. These are tips that worked for us on our path to financial independence (where we gave 26% of our gross income and still achieved FI in our 40’s).
Just start with a small amount — $3 a day, $100 a month, $1,500 a year. Whatever works for you. Then increase it a bit here and there over time until it grows into something substantial. In this way it’s very similar to growing your savings — small changes over time can have a big impact.
Doing this will make you a giver faster than anything else because you’ll see the needs firsthand. You’ll witness people in tough situations and your natural tendency will be to help as much as you can.
We always put giving into our budgets just like we included food, clothing, and housing. Since it was planned for, giving was never a surprise and we were always prepared for it.
A large income solves a lot of problems. Where to find “extra” money for giving is one of them. Because we focused on growing our income, we were able to pay off our mortgage, max out our 401k, live a great lifestyle, accumulate wealth, and give — all at the same time.